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Minimum Wage in Panama Raised To As High As $416 Per Month

By OHIGGINIS ARCIA JARAMILLO for La Prensa - The waiting has ended. The Panamanian government issued an executive order yesterday establishing new minimum wages which will take effect starting 1 January 2010. This measure, which will put more money into the pockets of 250,000 workers, includes classifications into two zones. Zone One - comprised of Panamá, Colón, San Miguelito, David, Santiago, Chitré, Aguadulce, Penonomé, La Chorrera, Arraiján and the District of Bocas del Toro - increases were approved from $33 to $95 dollars per month. In other words, the new minimum wage will increase from from $357 to $416 per month. The rest of the country is in Zone Two, where minimum wages will increase from $31 to $95 per month. This means that the minimum wage will go from $349 to $ 416. For both areas, the minimum wage varies according to activity and occupation. Panama's president Ricardo Martinelli described the increase as "an act of justice never before seen in the past 50 years," however both employers and employees are unhappy with the decision. (Editor's Comment: Obviously, business owners wanted to pay less and employees wanted to get more, which is why both sides are "unhappy." In Panama most people work a 45 hour week or about 180 hours in a month. Even at the highest rate of $416 per month that still only works out to about $2.31 per hour. This increase will put about an additional $15.7 million dollars per month into circulation in the Panamanian economy, and of course employers will now increase their prices to pass additional labor costs onto the public, so expect prices to rise slightly across the board, especially in those businesses such as retail outlets and grocery stores that rely heavily on minimum wage workers.)

While the exPats have no idea how a Panamanian family can survive earning what most of us spend at the grocery store, there is more to the story than just the base pay.

The local labor laws give the employees 30 days paid vacation, two weeks paid sick leave, a dozen official holidays and then there's Carnival and Semana Santa - So the average worker puts in about 9.5 months work for 13 months pay.

And then there's the issue idfalco raised about how hard they work when they are actually on the job.